mREIT preferred issues took a horrific hammering yesterday with almost every issue down at least 2% and many down 5-8%. Current yields in the 9%-10% area are very common.
I keep a list of all the mREIT preferred issues here.
While these yields are tempting I will not be buying any more mREIT preferreds now (I own 1 ARR-C and it has been painful) because like some other income issues the mREIT’s are difficult to understand and thus when interest rates are moving folks simply sell them.
Recall a few years ago when Covid hit many of the mREIT’s were forced to suspend their dividends (later reinstated) as liquidity dried up and lenders (mREITs borrow money to lever their portfolio’s) demanded more collateral. With interest rates moving higher it appears investors believe that this could happen again–and of course it can happen.
I will be watching these issues closely because at some point in the future stability will return to the marketplace and there may be some tasty yields and capital gains to be had in the sector.